The development venture that bought 701 Seventh Ave. in Manhattan’s Times Square in October 2012 has completed $815 million in refinancing.

The development venture that bought 701 Seventh Ave. in Manhattan’s Times Square in October 2012 has completed an $815 million refinance of its previous indebtedness, Winthrop Realty Trust, which holds a preferred equity interest in the venture, announced Tuesday. The project, whose backers also include The Witkoff Group and New Valley L.L.C., will consist of a 452-room hotel and 80,000 square feet of retail space.

The project – Manhattan’s EDITION part deux will be smack in the middle of Times Square. It is one of several EDITION properties that will open over the next few years. The brand has a unique history in terms of its debut. The first EDITION opened as Waikiki EDITION in Hawaii in 2010, but the property has since been rebranded under new ownership as Modern Honolulu. The change makes Istanbul EDITION in Turkey the first EDITION hotel.

Times Square EDITION will be developed in a joint venture with The Witkoff Group, Winthrop Realty Trust, New Valley L.L.C. and Maefield Development. The hotel will be part of a 100,000-square-foot mixed-use project that Marriott and hotelier Ian Schrager are developing with a construction loan from Starwood Property Trust Inc. and iStar Financial Inc. in the amount of $815 million; a sum that includes the development of the hotel. Marriott obtained additional collateral for the loan by giving the lenders the right to require Marriott to buy the hotel for $314.6 million in the event of a default. Starwood Property Trust plays an additional role in the endeavor as an equity investor along with Starwood Capital Group Global L.L.C.

The property will also feature a 20,000-square-foot LED sign about 120 feet high.

Demolition of the existing buildings at the site is under way, John Alba, chief investment officer at Winthrop, told Commercial Property Executive. He added, however, that “It’s slow, tedious demo” being done mostly by hand and from inside.

That’s because the Times Square area is so congested, Alba explained, and also because the development venture has to save at least 50 percent of the original facade to be allowed to keep the existing billboard. Under current codes, the billboard would be too high and too close to the street.

Groundbreaking will happen by spring, Alba said. Construction of the retail and hotel space is expected to be completed in 2017.

The refi consists of a $237.5 million mortgage loan and $315 million mezzanine loan, both of which bear interest at LIBOR plus 8 percent, are interest-only and mature on Jan. 31, 2017, subject to two one-year extension terms. The previous mortgage and mezzanine loans were at LIBOR plus 11 percent.

The refi package also includes supplemental loans totaling $262.5 million, which will become effective on certain conditions. These conditions relate essentially to construction permits and similar matters, Alba told CPE.

In connection with the refi, Winthrop made an additional contribution to the venture of $32.5 million, bringing its aggregate capital contribution to $85.9 million.

The Edition hotel will be New York’s second such. Marriott’s first Edition in the Big Apple is scheduled to open next year in the Clock Tower building at 5 Madison Ave.

In the Witkoff release, chairman/CEO Steve Witkoff called the hotel/retail project “the most significant new development in Times Square in a number of years … In addition to introducing the extraordinary Edition brand to Midtown, the project will feature a significant amount of prime retail space in one of the world’s most trafficked and successful shopping districts.”

Mark Elliott of Hodges Ward Elliott acted as a hotel advisor to The Witkoff Group and partners.